HC Deb 13 April 1994 vol 241 cc194-6
7. Mr. Battle

To ask the President of the Board of Trade if he will review the power of the utility regulators over high charges and preferential boardroom share options.

The Parliamentary Under-Secretary of State for Corporate Affairs (Mr. Neil Hamilton)

The utility regulators have sufficient powers to protect consumers' interests over a range of issues, including prices. The remuneration of company directors is a matter for the company concerned and its shareholders.

Mr. Battle

Is the Minister aware that the chairman of Yorkshire Water, Sir Gordon Jones, stands to make £260,000 profit on his share option deal, but is giving many of my constituents the single option of accepting expensive, unaffordable metering? All other water consumers have no option but to pay unacceptable and extortionate charges. When will the Minister give real power to the regulators and redress that injustice?

Mr. Hamilton

If the hon. Gentleman is so concerned about the arrangement, I suggest that he buys some shares in the company, attends the annual general meeting and speaks out there. In general, the position is substantially improved compared with that under the Labour Government, when such individuals were paid large sums for turning in large losses, which were ultimately subsidised by taxpayers. Now, at least, profits are being divided, part among employees and part among directors. That seems a significant improvement.

Mr. Ian Taylor

Is it not typical of the Opposition to show envy about the success of companies and the share option schemes, which are valuable only because the companies have done very well? Is it not a fact that many of the executive share option schemes about which the Opposition complain are linked to employee share option schemes, which are also valuable if the company has done well?

Mr. Hamilton

I agree entirely with my hon. Friend. That is an important element in providing incentives to companies to become more efficient, which is in the general interest of consumers. As the answer to the question of the hon. Member for Leeds, West (Mr. Battle) shows, never has the difference between the two parties in the House been so amply demonstrated. As defined by Winston Churchill, while capitalism involves the unequal sharing of blessings, socialism means the equal sharing of misery.

Mrs. Helen Jackson

Is the Minister aware of the extreme public anger and fury in Yorkshire about the actions of the water regulator, who has extended his power through the President of the Board of Trade despite numerous letters from Members of Parliament on both sides of the House, thus allowing the chairman of Ofwat's Yorkshire customer services committee to be sacked by the regulator? Does that not smack of power, patronage and preference, which is out of place in a public service such as the water industry?

Mr. Hamilton

It is a bit of a cheek for a Labour Member of Parliament to accuse the Government or any organisation such as Ofwat of nepotism or partiality. It was, after all, the last Labour Prime Minister who appointed his son-in-law as Her Majesty's ambassador in Washington. The director general of Ofwat gave evidence this morning to the Select Committee on the Environment and I am sure that he is capable of defending himself. Ofwat has rejected claims that the director general has acted in any way improperly in making appointments to the customer services committee. Of course, a balance must be drawn between experience and turnover.